Transcript: 165 – Sam Reti on Starting Muzie.Live (Part 1)
Transcript for 165 – Sam Reti on Starting Muzie.Live (Part 1)
[00:00:00] Andrea: Hey, it’s Andrea with Music Studio Startup, the podcast about the business of teaching music. Learn from the startup stories of music teachers who are doing incredible things with their studios. Be inspired by creative musicians who are branching out and thriving as entrepreneurs. Be empowered by the insights of experts who will help you grow your own studio.
Let’s get started.
Thanks to everyone who joined our Tax Insights workshop last week and for taking the time to send such kind messages afterward. If you missed it, you can still catch the replay at musicstudiostartup.com/taxinsights. Today’s episode is part one of a super interesting two-part conversation with Sam Reti.
A music teacher and the visionary behind the popular online music lesson platform Muzie.Live. In this episode, Sam shares how a college class at Berkeley, countless Uber and Lyft rides and a whole lot of Chipotle burritos helped launch his first business. And why learning when to quit was just as important as knowing when to keep going.
We talk about how his first app idea morphed into a second and then a third, which is the Muzie we know today. We talk about the decision to bootstrap instead of raising investor money, how Sam adapted when his original business idea didn’t pan out, and what he’s learned about growing in customer base organically in the music education world.
Sam gives an honest behind the scenes look at startup life complete with all the messy unglamorous realities you don’t usually hear about. Here’s my conversation with Sam. Hi Sam, welcome to the podcast. Thank you for being here today. Can you introduce yourself and tell us what you do?
[00:01:43] Sam Reti: Awesome. Yeah, thanks so much for having me.
My name’s Sam Reti. I’m the CEO and Co-founder of Muzie.Live and Muzie RTC. And I’m a guitar teacher. But yeah, basically I run software companies that supply technology to music teachers.
[00:01:59] Andrea: Excellent. And can you tell us what specifically Muzie does?
[00:02:04] Sam Reti: Yeah, so Muzie started out as an online teaching platform. So you can think of it like Zoom for music teachers.
Over the years that sort of evolved into more of a just general teaching platform, so it doesn’t necessarily have to be online lessons. But the thing we specialized in is building our own video conferencing technology that sort of takes away a lot of the issues people have with like sound transmission when you’re doing video lessons.
So it’s really high fidelity audio and video, and then it’s loaded with tools for teaching in person, online groups, hybrid lessons, recitals, all that kind of stuff.
[00:02:39] Andrea: All the kinds of things that the virtual studio needs. And can you tell us a bit about the technical aspects, like how are you able to make it high fidelity, low latency, all those things?
[00:02:48] Sam Reti: Yeah, absolutely. So Muzie is built using web RTC, which is basically the sort of protocol for video conferencing. So we built our own web RTC platform from scratch. So that’s pretty rare in most industries. A lot of times you’ll just go and get something off the shelf and then put your branding on top of it.
But almost all of those are designed for business meetings, even, you know, Zoom and FaceTime and all that stuff. But even if you’re building your own platform, you can go to other companies and get their technology. Plug it in. And then it still is designed really for business meetings and things of that nature.
So. Building Muzie completely from scratch. We knew from day one this was going to be music education, so you know, when we are thinking about that, we prioritize audio over video, which is usually the opposite for most other platforms. Not to say the video quality is not still high definition, but when you put all the focus on making sure the audio is as crisp as it can possibly be, you just naturally sort of do things in a slightly different way.
Some of the technical terms, or one of them is full duplex audio. Basically what that means is that there’s two audio streams going at at the same time, instead of most platforms where they share a stream. The outcome of that is, let’s say you are playing your piano and I wanna sing over that. Mm. You will hear both of those things at the same time.
Whereas a typical platform, one of them will usually cancel out the other.
I’m sure you’ve probably had the experience on i’ll just use Zoom as the sort of blanket example. I’m not just picking on them, but Okay. That’s the one everyone knows the most. So a lot of what we hear is, well I, I’ll be playing or talking and as soon as someone else starts talking or playing it like cuts out my signal and replaces it with theirs.
And that’s basically one of the things that we sort of knew coming into this. We were gonna have to deal with that right away. And then. We, since we built all the servers ourselves and everything is custom built from the ground up, we have full control over like speed and latency and the sizes of the packets, which is the data being sent back and forth.
So that’s something that most other businesses don’t have control over because they’re usually using something off the shelf or some open source project so that they’re then leveraging for themselves. The reason most people don’t do it is is expensive and it’s time consuming. And the level of sort of technical understanding you need to build something like this from scratch is pretty big, which is just sort of lucky.
‘Cause Muzie is my dad and I. And my dad is sort of a wizard in the, in the software world. So he’s been doing it for a long time.
[00:05:37] Andrea: That was gonna be my next question is do you have any technical background?
[00:05:40] Sam Reti: So I am very minimal. Um, I have, I have a music degree, so I went to Berkeley. But when it comes to actually like running the business.
My dad has the technical background. He’s got over 40 years of software development under his belt. So he’s really the genius that builds this stuff. But I, um, more the idea man, but also the, uh, designer and basically anything front end is my work. Anything back end is his work.
[00:06:08] Andrea: Okay.
[00:06:08] Sam Reti: So if you see it, then I probably had a hand in how it looks and how it functions and what it does.
If you don’t see it. You know? Or, or you know if you hear it, it’s him.
[00:06:19] Andrea: Or don’t hear it.
[00:06:20] Sam Reti: Exactly. It’s kind of lucky though, ’cause my dad was also a professional drummer back in the eighties, so his skillset is software engineering and music. And then, my skillset is music and sort of more entrepreneurship, business development, design, things like that.
So the two of us do sort of complete each other’s skillsets.
Which is why we’ve been able to sort of do this and have it work this way.
[00:06:47] Andrea: Yeah. Okay. So where did the idea come from? Was it your idea? Was it your dad’s idea? How did it start?
[00:06:53] Sam Reti: Yeah, so it actually all started as a college project.
So it was at Berkeley. I was in this class called the Startup Lab, and as far as I’m aware, it was like the first and only time they did this class. But it was cool because it was in conjuncture with MIT, so it was MIT and Berkeley College of Music. ’cause they’re physically only like half a mile away from each other.
We used to meet up a design firm in Cambridge, Massachusetts, and we had a class with one MIT professor and one Berkeley professor, and it was all about how to ideate, how to come up with ideas, how to build a minimally viable product, how to actually like reach out to investors, how to build something from scratch and more.
Hands on than your typical sort of like entrepreneur class that you might go to.
[00:07:38] Andrea: Mm-hmm
[00:07:39] Sam Reti: And so I was one of the few people who I had this idea, and the original idea was actually a practice software for students and mainly focused at college students. The idea was to sort of allow people to go into the platform.
Fill in these little cards with all of the things they needed to work on. And then we created an algorithm that would organize all of that into a practice routine for you. Yeah. So it was sort of took the pressure of being like, oh, I need to practice my chords and scales and all of these songs for my labs and all this other stuff that you kind of have loaded onto you as , a music student. It was the practice generator was sort of the idea that we had. So I pitched this at the class and they really liked the idea. They thought it was pretty clever. And I built a prototype using like Google slides and things to like show how it would look and what it could do and everything.
And then I showed it to my dad and he was like, oh, that’s actually pretty clever. He’s like, I could probably make a really simple prototype of that in, you know, a couple days or a couple weeks. So just in his free time he started coming up with, you know, like a little prototype of it and then the, it kind of went back and forth.
‘Cause like each week I’d come to class with like a little bit more done and they were like. Oh, you’re like actually doing this. And so then they would give me feedback and we’d go back. And so it kinda went around in that circle. And by the end of the class, I actually had a full functioning product and Berkeley was actually the very first people to use it.
So the professors were like, we should get this into the school.
[00:09:10] Andrea: Oh wow. Okay.
[00:09:11] Sam Reti: And so Berkeley sort of became like the first customer basically and really helped us kinda flush out more ideas. So right after I graduated, we incorporated that as a company with me, me and my dad as the owners of the business.
And we ran that for about four years and it never quite took off to the level that, you know, you kind of hope your projects will.
[00:09:33] Andrea: Mm-hmm.
[00:09:34] Sam Reti: Well, I mean, I learned so much about how to design things, how to build things, how to give up on ideas when they weren’t working. . You know, how to pivot. Yeah. You know, things like that, that are vital and that failing was sort of the pivot point to Muzie succeeding because when we decided it was like late 2018, early 2019, that we were like, okay, this isn’t working, like there’s, we don’t have enough customers. It’s not growing fast enough. The, the products had gotten kind of too bloated. There was just too much stuff in there and it sort of lost its way.
They call it feature creep, which is basically you just keep adding stuff ’cause people keep asking and you don’t know when to say no.
So that definitely happened and kind of killed the core of the idea. But early 2019, we were like, well, we’re not quite done. Like that just didn’t work. And we sort of sat down and were like, do we have any other ideas? And honestly, I can’t really remember what the bug was, but somehow I said, I was like, well online lessons are gonna become more popular over time because you know, the technology’s getting better. Little did we know what was around the corner.
[00:10:42] Andrea: Yeah.
[00:10:43] Sam Reti: And so we started building Muzie, and the idea was actually originally to be like a tutoring service with a unique payment structure. So the idea was that you could have students go to the platform, request a tutor, and it would instantly pair them with a live tutor. So there’s a lot of marketplaces where you can go and find a teacher and book a lesson. We wanted to kind of strip out the whole booking and scheduling part of it and just have you connect instantly and you would pay by the minute, and then the teacher would just get paid out right then and there.
So, for a lack of a better term, it was like Uber for music teachers.
[00:11:18] Andrea: Okay.
[00:11:19] Sam Reti: And so that was cool. So we built all the technology for it and we thought it was a really neat idea, but we rolled that out on January 10th, 2020. So we kind of joke that like the first week we had a couple of teachers trying it out and there are few students coming through and it was cool.
But within another week later, everybody was like, this is great, but. We hear that, you know, lockdown is coming and we’re gonna need to start teaching our own lessons with our own students. We’re not so worried about getting new students right now. We’re more worried about maintaining what we have.
[00:11:53] Andrea: Mm-hmm.
[00:11:54] Sam Reti: And so this was probably the most important decision we ever made because we had literally just spent over a year building all of this stuff and we’re super proud of it. And then I had to come back into basically a meeting and go okay, so we’re gonna scrap 50% of this product, and we’re gonna go in a completely different direction.
And of course, there was a bit of like a, are you sure?
[00:12:20] Andrea: Let’s give it some more time. More than two weeks. Right?
[00:12:23] Sam Reti: It’s like, it’s only been a few weeks. It’s, you know. This is too early to determine that it’s not working. And I was like, no, it’s not. It’s not working, but there’s a better over there. And so we pivoted and we took away the tutoring thing and we just built it out so teachers could bring their own students.
And that was a hundred percent the best thing we ever did because literally within another month, the lockdown stuff was, you know kind of finalized and everybody was online and sort of in this space. We were sort of like the first to market as a dedicated environment for, you know, teachers to go specifically for online lessons.
Yeah. And luckily we had already spent the previous year developing a lot of the stuff that you need for online lessons. So then we just spent the next five years now, just fine tuning that and kind of building out what people need and you know, kind of going from there.
[00:13:16] Andrea: Yeah. Okay. So the first iteration of Muzie was more marketplace like kind of lead generation. Connection kind of platform. It did have the online lesson capability, because that’s how, that’s how you connected. Okay. And you stripped away the marketplace part focused on the video. Okay.
[00:13:36] Sam Reti: Yep. Exactly. Yeah.
[00:13:38] Andrea: Interesting. Alright, so good decision. Back in early 2020. I’m curious too about that Berkeley MIT class, were they also teaching you like how to build the business model around the product? Or is it more focused on like doing a project and getting it ready for market.
[00:13:54] Sam Reti: Yeah. So it was pretty good. Well, the way the class was structured, it was a three hour class and the first hour was always an invited guest and the, the guests were like the CEO of Puma, the CIO of Nike, the head of Avid Studios, which is like Pro Tools and Sibelius, they were like big hitting.
You know, people that was really interesting because. That gave us an insight into what it actually is like to run a business. And so that was cool because a lot of the other entrepreneur or business classes they talk a lot about like the backend of business, but not really the execution of like, Hey, I have a product. What do I do now?
Or I almost have a product, or I’ve got a really good idea. So we learned how to iterate on the design of the product. We learned how to work with teams to come up with different collaborations. And then we did learn a bit more about, okay, how do you go and find funding? How do you go and reach out to potential partners?
Or how do you get a relationship with another company? And that all was, some of it was indirect just because like I was doing it. And so like working with Berkeley directly sort of gave me that whole partnership learning curve. In real time. So, yeah, you know, some of that stuff wasn’t exactly in the curriculum, but the class was also very much you made it what you made it.
Like there were some kids who just, they had an idea, but they never actually, you know, did anything with the idea. It just stayed in idea phase forever. And that I actually think was kind of interesting learning thing on its own because I was seeing the very direct, like if you don’t do a lot of work and actually do the work, your idea will just stay an idea forever.
[00:15:49] Andrea: Mm-hmm.
[00:15:49] Sam Reti: And of course I had a really lucky situation having someone you know in my family who could execute on the technical aspects of what we’re trying to do. So that’s sort of my trump card there. But on, on the flip side, there is still, you know, a whole side of like, you’ve just gotta do it.
Like, and they were happy to guide us in ways. And some of the advice I got was some of the best advice, you know, I ever got from anyone was, uh, one particular piece of advice was about selling companies. ‘Cause obviously when you just got an idea, you’re not really thinking about how is it gonna end.
[00:16:21] Andrea: Mm-hmm.
[00:16:22] Sam Reti: But the guy who taught the class had just sold his software company. It was a pretty big deal. Like it, it sold for millions of dollars and he came back to sort of teach us. But what was really interesting is he started teaching and talking about what an exit looks like. And as a software company, you know, in the tech world that’s like super obvious and something that’s always thought about in the music world. That’s not really, you’re not really looking for an exit when you’re trying to like build a band or you’re trying to as a solo artist. So those were things I had never heard of. I’d never thought about the fact that like Gibson or Fender, or like Sweetwater might want to come and buy the product from you. And actually buy the company as a whole. And he taught me a lot about like what kind of things are important, how the data is actually the most important thing and the product is actually secondary. And at the time when we were doing practicing stuff, he was, you know, kinda giving us ideas like.
You know, you should be collecting data about like what instrument do they play? What manufacturer is that instrument? The example he used was Nike spent like a billion dollars buying up running apps in like the 2010 to 2015, and no one could figure out what they were doing ’cause they kept shutting down all of these apps and people were like, oh, they’re just trying to clear the market. They’re just trying to clear the market. And what it turned out they were doing is they were buying all the running apps because in the app you put what pair of shoes you run with and that’s all they wanted to know. So they spent like a billion dollars basically buying up the information of what pair of shoes do you have?
And then it became, for them, it was entirely a marketing ploy. So from a business point of view, that was all stuff that was like, I had no idea about any of that. So it was really interesting having that class to sort of you know, show me the other angles that you can kind of take a business in. Because I was really just thinking of it from like a feature point of view.
I was like, oh, wouldn’t it be cool if I could do this or meet if it could track that practice progress or like, you know, wouldn’t it be cool if a teacher could send a file or you could make an assignment or, or whatever It was like I wasn’t thinking of it from like the business side. I was thinking of it way more from the product side.
[00:18:30] Andrea: Yeah.
[00:18:31] Sam Reti: So that was really interesting.
[00:18:33] Andrea: Alright, so you’ve got this idea, you and your dad are working on it. How did you fund those early years?
[00:18:40] Sam Reti: Yeah, so, uh, entirely bootstrapped. So we got kinda lucky with the first sort of, I mean, honestly luck is always preparation and opportunity meeting. And I do really believe that because when I say lucky, it’s also like I said, you actually had to do the thing. There’s no one there just waiting to hand it to you. So we just, in our free time, built the first prototype and started working on that. And because I was at Berkeley, I was able to literally walk around school and be like, Hey, do you want to try my practice software?
Like, do you wanna try and practice software? As you remember, this is kind of funny, like shows you how like random things can be, is Chipotle was having a competition, right? And the competition was like eat like 20 burritos a month or something for like three months in a row, and you would get a free catering meal from Chipotle.
It was something ridiculous like that. And I’m addicted to Chipotle, so all my friends were like, well, we already know who’s gonna win this one. So, so I did it and I, I won the catering meal and I held an event at the college that was petered by Chipotle. So it was a free event anyone was free to come.
College students love food and I held a presentation about my company as it was in like the early phase. And that actually got like a couple of people to, to find out about it and sign up and try it out. So, you know, you really leverage like the things that you have access to. Like as a broke college kid, I could not afford to, you know, cater a Chipotle event or whatever.
So the fact was like, because I was already buying my daily burrito, it sort of worked out to help in that way. So little silly things like that actually go a long way. And I mean, I literally put up flyers and went very old school. I drove to every single music school in Boston. Or walked around the city to them and handed out leaflets that explained what the product was.
I went really old school, and this was kind of before the days of like big Facebook groups. So Facebook groups now are the best strategy for growing this sort of thing, but there was no music teacher group on Facebook with 20,000 teachers in it that just wasn’t a thing yet. Okay. So this was, it was a much more dispersed market, so it was much trickier to actually find people.
So you have to go old school and just show up and knock on the front door.
[00:21:12] Andrea: Okay. And this was for your original practice app. That’s how you’re getting the word out there?
[00:21:15] Sam Reti: And that’s what got the momentum to stay alive for a little bit. And then at one point, I, I took another job. So I took a, a sales job at a tutoring company.
I was just, you know, doing partnership development for a tutoring software company. And I did that job strategically because the business model actually aligned really closely with what I was trying to do.
[00:21:36] Andrea: Yeah, sounds like a good move.
[00:21:37] Sam Reti: So I sort of did it on purpose, but I obviously, I also needed, you know, more income to kind of sustain everything.
So you know the idea that if you’re an entrepreneur you can only do your thing. It’s like, no, you do your thing when you have time for your thing, you make money however you need to make money.
[00:21:53] Andrea: However you need to.
[00:21:54] Sam Reti: And I drove Lyft and Uber for years too. So like, you know, when I needed more cash, I would just get in the car and go drive around for a couple hours, sell the not glamorous side of building a business.
[00:22:04] Andrea: Yeah. You know, you talked about those entrepreneurs that came and spoke at your class and I had a lot of entrepreneurs come speak in my entrepreneurship classes as well in college. And I’m so grateful ’cause you get, it’s like those memes like what I thought I’d be doing, what my parents think I do, what my friends, anybody actually do.
Like what you actually do is eat the burritos to fund your
[00:22:24] Sam Reti: Yeah, that is literally it. Like it’s, it is like, I mean, the way I did it was I would drive Lyft and Uber enough. So I had enough money to get my burrito for the day and then enough money to sort of put like $50 aside each day. And then that was sort of like my budget.
I was like, okay, if I can make 50 bucks a day doing Uber and then like, you know, and it kind of had it all mapped out and every waking minute it was, you know, when I wasn’t doing Uber and it was kind of funny ’cause that was a funny job that was also a little serendipity because I would be driving around so much, I would see music stores driving around, I’d be like.
And so I would just turn off the app for a few minutes and then go into the store, give them a flyer. I even once, and this was the biggest fumble of my entire life, and this is like one of those things will haunt me forever. I was driving a lady in the car and in the backseat I kept a couple flyers, uhhuh because people would always just read through them and just get chatting and yeah, you never know who you’re gonna pick up.
And I picked up, um, a lady who was like, asking lots of questions about the business and, and she was like, oh, would you ever, you know, want to get investment? I was like, yeah. You know, at some point I think that would be great. And this was really early days, so I, I wasn’t really sure about investment and how that all worked.
So it kind of was like, yeah, you know, maybe at some point, I’m not really sure. And she goes, oh, well, you know. My husband’s roommate in college is the CEO of Lyft, the company that I’m currently driving for. And then she’s like, well, you know, if you need an investment, but nevermind. And I got outta the car and I was like, uh, no.
So you never know who you’re gonna meet. Is, uh, the moral of that story and, and say yes.
[00:24:03] Andrea: Always collect email addresses. That’s crazy. Okay, so you. For that business you didn’t take any funding for Muzie? Have you taken any funding?
[00:24:11] Sam Reti: No. Muzie was a different sort of luck, so this one I haven’t needed to go and get the other software job or something.
And timing was everything. We rolled Muzie out, as I said, January, 2020. The users started flooding in. We kind of joke that the first week we had like, you know, five teachers and 20 students and by the end of the first month there was like 400 teachers and a couple thousand students. And then by the end of the first year there’s like 10,000 people on the platform, you know?
So the scale was like, and we kinda laughed ’cause it the first week was like, oh no, I’m not sure this is gonna work. And the second week was like. Oh no, there’s too many people on the platform. So we got really lucky in that sense because of the timing. We built all the technology prior to launching the product, so because we had all of the hard stuff done, the rest of what we needed to build was pretty easy to just build as we went, which didn’t require us to take a large amount of funding to grow the business. And I’m actually really glad I didn’t. This is one of those businesses where I think people overestimate how much money is in the, this sort of education space. But if you take two or $3 million for investment, you’re expected to pay back twice that amount in two years, right?
So that means you’ve gotta figure out how to get your business to return, say four to $6 million in two years, right? Adoption of education software is a slow process, so people need to vet it, they need to try it out, they need to get comfortable with it, and then they’ll sign up. And that’s just your private teacher that’s not even talking about big institutions.
You know, the big institutions take months and months, if not. You know, six months to a year to like really adopt something new, push it system wide, and really become like an invested partner. So I didn’t see a realistic way of returning that money. And we have been approached by investors for that sort of thing.
And now I say no on a, we don’t really need it. It wouldn’t help me in any strategic way. Muzie does fine bringing in the money, and we own a hundred percent of the business.
[00:26:26] Andrea: Mm-hmm.
[00:26:26] Sam Reti: And so that’s a really rare situation to find yourself in, especially on the software side of things, because. If we go to sell Muzie, if that ever is the decision, then we get a hundred percent of what it’s sold for.
We don’t have to split that 50 50 with some, sometimes it’s a lot more than 50 50. Like often you get diluted down to the point where you only own 10% of your own company.
So it’s like if you sold your business for $10 million, but you only own 10%. Then you’re gonna get a million dollars. If you own the whole business and you sell it for $2 million, then you’re gonna get 2 million.
You know? So it’s sometimes it’s better to own 1% of like a billion than a hundred percent of a million, but in this market there aren’t any billion dollar companies, so, so you know, it’s kind of skewed the other way. You’re better off owning as much as you can.
[00:27:20] Andrea: Yeah. And I think that’s like early covid there was a lot of investment into online education stuff and like kind of overinflated the market. And then they realized, oh, the pie is this big and, and we poured way too much in pour. . So bunch of companies have gone under and
[00:27:37] Sam Reti: I watched. I mean, and I’m still watching it happen.
Unfortunately, you know, people think like, oh, a competitor’s gone out of business. That must be great for you. It’s like yes and no, right? It’s like, yes, I don’t have the direct competition right now and I can maybe get some of their users, but if too many of your competitors go under, then that’s a market problem.
So we saw way too much money being funneled into businesses in 2020. And I’ve watched five direct competitors go out of business in the last two years. So, and I know exactly why they all went outta business and it is all from overfunding. Because if the investor can’t return, double the money they put in or even return the money they put in. They’re gonna pressure you to sell. Typically that just means liquidation, which is sell for the assets that the business has, and usually just scrap everything. Or they realize that there’s not gonna ever be an exit and they just shut it down.
[00:28:34] Andrea: Mm-hmm.
[00:28:35] Sam Reti: And that happens quite a lot. There’s some big names in the industry that have gone out of business in the last couple years that was surprising to us. But then when we looked into it, it’s like, oh, you know, they took $10 million of funding. Like there’s no way they’re gonna pay back that amount of cash is so, you know, it is a double-edged sword. Like sometimes money is not actually a solution. It could be a massive problem.
[00:28:59] Andrea: Yeah. So you started having customers right away and with that income. Was there any moment where you felt like, oh gosh, should we raise funds? Can, like was it a temptation ever?
[00:29:11] Sam Reti: Yeah. Yeah, there’s definitely, and whenever someone reaches out to you with like a serious offer. You know, there’s, you know, we’ve had meetings with some of the biggest VCs in the world and there’s always a little bit of like, well, just having their reputation behind us maybe, maybe we are the one that breaks through the stratosphere. But then there’s, you gotta be realist about a lot of this stuff and be like, man, is that just gonna add so much stress to my life that it’s not gonna be fun to do this anymore. And like Muzie’s very much a lifestyle business where like it’s gotten to the point where like, we can live a pretty comfortable lifestyle and get to do the thing we want to do.
So it’s really hard to be like, yeah, I’d, I wanna have a boss now. Like that’s what funding is, is like when someone gives you a million dollars to do something, you are now at their beckoning call. You know, you have to bring in reports and you have to show growth and revenue projections and all of this stuff that we don’t really need to stress over so much.
Of course, we do all of that internally as a business, but we only answer to ourselves.
[00:30:13] Andrea: Yeah. You don’t have to justify decisions to someone else and, yeah, exactly. Yeah.
[00:30:16] Sam Reti: And actually that’s a really good point is things move way faster. So like, uh, as without any external influence, because a decision at Muzie is as simple as me and my dad sit down, we have a conversation, and then the thing gets decided on. There’s no board, there’s no directors, there’s no going through red tape or whatever it is. As simple as we wanna do the thing, we both agree that that’s the right thing to do and then we do it. Um, so that’s huge when you’re trying to stay competitive, uh, in, in a market that you do see new businesses popping up a lot. So we have to kind of keep our competitive edge, and part of that is being able to move quicker than most other people.
[00:30:58] Andrea: Were you prepared for that big influx of teachers as they started coming in 2020? Like how about your infrastructure? Did it hold up or were you scrambling there?
[00:31:07] Sam Reti: Infrastructure technically, like the, the software itself was totally fine.
We built that on a scaling sort of model. So, um, the more people came in, the servers and systems sort of automatically scale themselves up. Um, that was just good design on like my dad’s part, understanding that, you know, if you do get a huge influx that you weren’t ready for you don’t want your servers to crash.
Uh, so everything on Muzie is, is is in like a flexible state, so to speak, from a business point of view though? No. So at that time, the only two people in the company were me and my dad, and he was actually still working full-time, like another software company. So yeah, that was like, they kind of joke, we were like, oh man, there’s nobody, nobody’s signing up.
And then we’re like, oh no. And so that was crazy ’cause it was like a hundred percent on me to onboard everybody. You know, I’d probably now done close to two or 3000 demos of Muzie myself and answered probably 20,000 chat support messages, you know, so, and that’s chat support conversations, not just the individual messages, you know?
And in the early days that was what it was, it was being awake at three o’clock in the morning because somebody in Australia wanted to try out Muzie. I was very much doing the 24 7. Yeah, like grind as a entrepreneur. More recently, I’ve kind of had to slow that down personally, just ’cause after five years, you cannot keep waking up at two o’clock in the morning to answer calls. But yeah, at the time it was like getting slapped in the face in a good way, but yeah. Yeah, it was a wake up call.
[00:32:49] Andrea: Have you brought anyone else on? Is there any customer support help?
[00:32:52] Sam Reti: Yeah, so we’ve had people come and go. We’ve had contractors. We’ve had employees and it took a while before we actually got anybody in there. Like the, the first two years I’d say was just the two of us doing everything.
[00:33:05] Andrea: So like 2020 to 20,
[00:33:06] Sam Reti: 22 early. Yeah. And even like early 2023 was still probably just two of us. Yeah. It’s funny actually now when I try to think back on the years, all the years just blur together, so I’m like, was it 2022 or 2023 we did that? But then we did have, we had people come in and help with like marketing and kind of taking off some of the load from my plate that was just things that I just couldn’t split my time between everything anymore. Uh, we still, development is still entirely on my dad’s plate. He’s honestly, he, he’s like having four developers, so that’s something that we are very fortunate about.
But yeah, having, you know, people to rely on has been been very nice. To kind of allow us to back off a little bit. But yeah, I mean, still though 90% of the stuff is on me, you know, as the sort of the face of Muzie, you know, I have to appear at all the things. I have to go to the conferences, I have to do a lot of the, all the demos still.
Um, mostly that’s just ’cause my background is music teaching, so I can speak best to music teachers about what it is you need and what you do. Hiring in for those roles is really difficult. There’s very few people out there who have a technical background and a music education background. So I found some roles are best that if I just keep doing them, then that’s fine ’cause that’s sort of my job description.
Yeah, it’s wild. I mean, it’s grown so much that is way beyond what we thought we were gonna do, so that in itself is pretty cool.
[00:34:38] Andrea: Mm-hmm. And then when were you able to start drawing a salary yourself from Muzie?
[00:34:43] Sam Reti: Uh, probably 2023. Yeah. Give or take, but not for the first two years easily. Which is something, again, a lot of people misunderstand because they’ll see numbers on the outside.
And one thing that is, nobody talks about this, and I think it’s really important to, to bring up, is revenue is not profit. So I think that’s one thing that a lot of people misunderstand. ‘Cause they will look at the subscription price, look at the number of users. And then I, and this happens all the time when I’m like even just telling like friends about my company, or I meet someone new and they’re asking about what I do and I’ll be like, oh yeah, we’ve got this many users.
And they’ll casually be like, oh, how much is it a month? And then I can see them doing the mental math. But the thing most people don’t understand is like. The running costs of software companies is extremely high. So, you know, even if you’re making a good number upfront, you know, like 80% of that goes to like business expenses, you know?
Of like actually running the company and, and then you gotta pay, you know, your taxes and all the other stuff, and you get paid last. That’s the, like, the thing that I think people don’t know is that like the very last money to come out of the account is the payment for us, and that is the whatever’s left kind of model, you know?
So it can be kind of variable. I mean, it’s pretty consistent, like we have a good idea of what to expect, but. It’s not like getting a paycheck from a regular job. You don’t get your paycheck every two weeks and it’s exactly the right amount with all your taxes taken out and all of that stuff. Like, it’s much more chaotic than that, you know?
[00:36:20] Andrea: And especially in those early years when there’s like always something to take the next dollar that comes in. Oh yeah. And, and it’s like, you know, you’re running at that unsustainable pace. So, yeah. Do I need money to go eat out this month or do I need money to pay someone else to do some marketing so I can sleep?
[00:36:41] Sam Reti: Yeah, yeah, yeah. Exactly. And unexpected expenses is a big one. Like, you know, people will offer you a partnership or you’ll find a conference that you want to go to, or you’ll find this opportunity for like an ad spend. And then you’ve gotta kind of turn around to your budget and be like, okay, well this was one of the not expected items.
You know, where, where do we cut from to make this thing work? Yeah, it’s, it’s weird ’cause there’s a lot more of that type of stuff going on than I think people realize. A lot of this stuff is a lot more by the seat of your pants than I think is assumed.
[00:37:10] Andrea: Yeah. And software’s even more disguised, I think, because you can’t see the storefront, you know? You see the website, but you can pop up a website for $15 a month. So why is your website more to run the mine? You know, so. Yeah.
[00:37:22] Sam Reti: It’s like people don’t realize like a, a website and a web app are very different. Like they look the same, but you know, they one requires custom servers and connections and databases and maintenance that you could never imagine.
Uh, the other is you tell Squarespace, here’s $15 a month. And look, I’ve got images on a page. Uh, so yeah.
[00:37:45] Andrea: And we’re going to pause the conversation here. Stay tuned for part two. This week in the Hub, our mastermind groups are kicking off Q2. The mastermind groups are all about figuring out our next thing and making progress towards those goals.
Last quarter, we had members meet revenue goals, file taxes, roll out new policies, streamline and implement new processes, practice healthy habits, plan and market summer programs, beef up their online presence, defend dissertations, perform concerts, have hard conversations, make big life decisions and more.
This is the perfect time to get plugged in for Q2 and have supportive accountability as you pursue your goals. To learn more, drop me a DM or visit musicstudiostartup.com/mastermind. You can find that link and all the links mentioned in this episode at musicstudiostartup.com/episode165. That’s all for today.
Thanks for listening. I’ll be back next week.